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From 1985 to 1991, Syria experienced a severe economic crisis. In response, the regime of Hafiz al-Asad implemented economic reforms designed to move the Syrian economy toward free-market capitalism. As seen in authoritarian regimes around the world during the past thirty years, political liberalization often accompanies economic reform. Yet, scholars and policymakers have typically viewed Syrian economic reform as politically unimportant: mere tactical maneuvers that strengthened the Asad regime by restoring economic growth. This thesis reevaluates the political importance of the reforms from a political economy perspective. Two surprising conclusions are reached: (1) the political legacy of the economic reforms has so weakened the Asad regime that prospects for political stability within Syria are poor; and (2) transition to democracy, or political liberalization, is the probable outcome of the coming instability. The ramifications of these conclusions are twofold. First, they serve as a warning to U.S. policymakers, suggesting that regional stability will remain elusive until the root causes of regional economic underperformance are addressed. Additionally, by explaining the political outcome of the 1985 Syrian economic crisis with a political economy model, this thesis undermines the notion of cultural exceptionalism as it is commonly applied to the Middle East.

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